Call for action over ‘illegal’ national data privacy rules

Date: 06/01/2000

By Peter Chapman

EU COMPANIES are calling on the European Commission to take action against Greece and Italy over onerous national data privacy rules which, they claim, are driving businesses out of the market.

Alistair Tempest, director of the EU-wide direct-marketing industry lobby group FEDMA, claims the two member states are going way beyond the provisions of the Union's 1995 data protection regime, which should have been implemented across the EU by last October.

He also accused the Commission of ignoring the issue while it concentrates on legal proceedings aimed at nine laggard member states - France, Luxembourg, the Netherlands, the UK, Germany, Ireland, Denmark, Spain and Austria - which have so far failed to implement the directive at all.

"Italy and Greece implemented the directive back in 1996 and did not do it well. A lot of our members are having serious problems as a result," he said. "The directive says that for mailing lists, you must give the consumer the right to opt out. But the Greek and Italian rules force firms to seek the permission of consumers before they mail them. That makes it very difficult because people are often not prepared to sign such statements."

Tempest added that the value of the Italian direct mail industry had dropped between 1996 and 1997 from €1.63 billion to €1.61 billion as a result of the measures. "The rules are so restrictive that it scared firms off. They were not interested in doing new mailings," he said.

Another problem with the Italian law, claim critics, is that it covers companies as well as private individuals. This means that firms sending marketing mailshots need the prior permission of companies they target.

They say similar Greek rules have caused less disruption because direct marketing is on a much smaller scale than in Italy, but claim they have discouraged new companies from using direct mail to attract customers in the Greek market.

Meanwhile, the EU and US are still struggling to find a solution to their long-running dispute over the terms of the Union's data privacy directive after talks on the issue ended in deadlock at last month's EU-US summit, although both sides have voiced hopes that a deal can be reached by March.

The directive sets strict legal standards for firms handling personal data. Crucially, it also allows member states to block exports of data to third countries, including the US, if their data-privacy regimes fall short of the Union's consumer protection standards.

The EU has yet to decide whether to recognise the US' private-sector 'safe harbour' scheme, which is designed to make up for the lack of US government privacy legislation. Under the scheme, firms complying with tough industry codes of conduct would be deemed to meet Union's standards.

EU companies are calling on the European Commission to take action against Greece and Italy over onerous national data privacy rules which, they claim, are driving businessess out of the market.